STOCK TITAN

WidePoint nine-month net loss narrows to $48.6K

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(Moderate)

Sentiment and the balance of points

Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.

Form Type
10-Q

Rhea-AI Filing Summary

WidePoint Corporation (WYY) reported nine-month revenue of $123.6 million, up 16% from $106.3 million, and net loss of $48,628 versus $1.9 million a year earlier. Gross profit rose to $17.6 million from $15.2 million. Third-quarter revenue was $45.1 million, compared with $35.5 million, and quarterly net loss was $192,009 versus $559,185.

Operating activities used $390,344 of cash in the first nine months, compared with $5.9 million provided a year earlier; the company cited receivables growth, partly offset by deferred revenue and payable timing. WidePoint may sell up to $15.5 million of common stock through its ATM agreement; no shares were sold under it during the period.

The DHS CWMS 3.0 successor award is under reevaluation after the GAO sustained in part a post-award protest and recommended a new award determination. DHS requested revised proposals after quarter-end, and WidePoint submitted one. The existing CWMS contract represented approximately 80% of nine-month revenue and 39% of gross profit; WidePoint said it may not retain the successor award.

2 points · 0 major

How this balance works

Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

Rhea-AI Sentiment measures something else, the tone of the wording.

1 major · 2 points

Hollow bars mark forward-looking points. How the balance works

Positive

  • Moderate pointNine-month revenue rose 16% to $123.6 million.
  • Moderate pointNine-month net loss narrowed to $48,628 from $1.9 million.

Negative

  • Major point. Forward-looking: it has not happened yet and may not happen.The existing CWMS contract represented approximately 80% of revenue; the successor award remains uncertain.
  • Moderate pointOperating cash flow used $390,344, versus $5.9 million provided in 2025.

Filing Explained

The CWMS-linked incentives are conditional: up to $0.6 million cash and $0.4 million in stock-based compensation; no cash liability was recorded at quarter-end.

WidePoint says DHS’s CWMS 3.0 award decision is pending; if the resolution favors WidePoint and applicable conditions are met, the company would owe up to $0.6 million in cash incentives and recognize up to $0.4 million in stock-based compensation over service periods.

No liability had been recognized for the contingent cash payments as of September 30, 2026.

Separately, WidePoint expects about $0.8 million in accelerated-filer compliance costs during the second half of 2026; capital spending is estimated at about $0.4 million for the rest of 2026 and could approximate $2.0 million in 2027.

Nine-month revenue $123.6 million Nine months ended September 30, 2026; $106.3 million in 2025.
Nine-month net loss $48,628 Nine months ended September 30, 2026; $1.9 million loss in 2025.
Nine-month gross profit $17.6 million Nine months ended September 30, 2026; $15.2 million in 2025.
Operating cash flow $390,344 used Nine months ended September 30, 2026; $5.9 million provided in 2025.
Third-quarter revenue $45.1 million Three months ended September 30, 2026; $35.5 million in 2025.
Existing CWMS contract share of revenue Approximately 80% Nine months ended September 30, 2026; successor award under reevaluation.
Existing CWMS contract share of gross profit 39% Nine months ended September 30, 2026; successor award under reevaluation.
ATM offering capacity Up to $15.5 million aggregate offering price Common stock sales under the ATM agreement; no sales during the nine months ended September 30, 2026.
Technology Management as a Service (TMaaS) technical
"provider of Technology Management as a Service (TMaaS)"
unbilled accounts receivable financial
"Unbilled accounts receivable represent revenues earned but not invoiced"
At The Market Offering Agreement financial
"entered into an At The Market Offering Agreement"
An at-the-market offering agreement is a contract that lets a company sell newly issued shares directly into the open market through a broker, at whatever price the stock is trading at that moment. For investors this matters because it can increase the number of shares available (which may dilute existing ownership) while providing a flexible, often faster way for the company to raise cash without fixing a price, similar to a vendor selling small batches at current market stalls rather than setting a single fixed price.
Indefinite Delivery, Indefinite Quantity (IDIQ) regulatory
"10-year Indefinite Delivery, Indefinite Quantity (IDIQ) contract"
Indefinite delivery, indefinite quantity (IDIQ) is a flexible contract method that allows a buyer to order an unspecified amount of goods or services over a period of time. It functions like a restaurant that agrees to provide meals whenever needed, up to a maximum amount, rather than committing to a fixed quantity upfront. For investors, IDIQ contracts offer ongoing opportunities and potential stability in revenue streams, though they also involve uncertainty about exact future orders.
Authority to Operate regulatory
"was granted an Authority to Operate by the U.S. Department of Homeland Security"
A formal, documented approval from a regulator or designated authorizing official that allows a system, product, facility, or operation to run after tests and compliance checks show risks are managed to an acceptable level. It’s like a license or safety check that certifies operations meet required rules and controls; for investors, it signals reduced regulatory uncertainty and permission to begin or continue revenue-generating activities under oversight.
FedRAMP Certified regulatory
"ITMS platform has received the FedRAMP Certified status"
A designation used for a cloud service or cloud service provider that has completed the Federal Risk and Authorization Management Program (FedRAMP) security assessment and received an authorization to operate from a U.S. federal government authority. FedRAMP establishes a standardized set of security controls, an independent assessment process (conducted by an accredited Third Party Assessment Organization), and ongoing monitoring requirements; authorization can be granted by an individual federal agency or by the program’s Joint Authorization Board. The label indicates the service meets FedRAMP’s baseline security requirements for handling federal data, but it specifically applies to cloud services used by U.S. federal agencies and does not itself certify suitability for non‑federal uses or replace other compliance obligations.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What revenue and net loss did WYY report for the first nine months of 2026?

WidePoint reported revenue of $123.6 million and a net loss of $48,628 for the nine months ended September 30, 2026. In the comparable 2025 period, revenue was $106.3 million and net loss was $1.9 million.

What is the status of WYY's DHS CWMS 3.0 contract award?

The GAO sustained in part a post-award protest and recommended that DHS reevaluate proposals and make a new award determination. DHS later requested revised proposals, which WidePoint submitted for evaluation; the company said it cannot assure it will retain the award.

Did WYY sell shares under its ATM agreement in 2026?

WidePoint reported no sales under its ATM agreement during the nine months ended September 30, 2026. The agreement permits common-stock sales from time to time at an aggregate offering price of up to $15.5 million; the company expects any net proceeds to support general corporate purposes.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

For the quarterly period ended September 30, 2026

 

 

or

 

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

For the transition period from __________________ to ___________________

 

 

 

Commission File Number: 001-33035

 

WidePoint Corporation

(Exact name of Registrant as specified in its charter)

 

Delaware

 

52-2040275

(State or other jurisdiction of

 

(I.R.S. employer

incorporation or organization)

 

identification no.)

 

11250 Waples Mill Road, South Tower 210, Fairfax, Virginia

22030

(Address of principal executive offices)

(Zip Code)

 

(703) 349-2577

(Registrant’s telephone number, including area code)

 

Securities Registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

Trading Symbol

Name of Exchange on Which Registered

Common Stock, $0.001 par value per share

WYY

NYSE American

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes ☒     No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files): Yes ☒     No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes ☐     No ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐     No ☒

 

As of November 6, 2026, there were 10,017,612 shares of the registrant’s Common Stock issued and outstanding.

 

 

 

 

WIDEPOINT CORPORATION

 

INDEX

 

 

 

Page No.

 

Part I. FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2026 and 2025

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2026 and 2025

 

4

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025

 

5

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2026 and 2025

 

6

 

 

 

 

 

 

 

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2026 and 2025

 

8

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

9

 

 

 

 

 

 

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

 

23

 

 

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

33

 

 

 

 

 

 

Item 4.

 Controls and Procedures

 

33

 

 

 

 

 

 

Part II. OTHER INFORMATION

 

 

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

34

 

Item 1A.

Risk Factors

 

34

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

34

 

Item 3.

Defaults Upon Senior Securities

 

34

 

Item 4.

Mine Safety Disclosures

 

34

 

Item 5.

Other Information

 

35

 

Item 6.

Exhibits

 

36

 

 

 

 

 

 

SIGNATURES

 

37

 

 

 

 

 

 

CERTIFICATIONS

 

 

 

 

 
2

Table of Contents

 

PART I. FINANCIAL INFORMATION

 

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

 

WIDEPOINT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

THREE MONTHS ENDED

 

 

NINE MONTHS ENDED

 

 

 

SEPTEMBER 30,

 

 

SEPTEMBER 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

 

 

(Unaudited)

 

REVENUES

 

$45,066,908

 

 

$35,526,949

 

 

$123,642,520

 

 

$106,320,797

 

COST OF REVENUES (including amortization and depreciation of $261,479, $424,411, $813,530, and $1,402,836, respectively)

 

 

38,881,325

 

 

 

30,251,637

 

 

 

106,012,455

 

 

 

91,149,722

 

GROSS PROFIT

 

 

6,185,583

 

 

 

5,275,312

 

 

 

17,630,065

 

 

 

15,171,075

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

646,723

 

 

 

677,618

 

 

 

1,908,155

 

 

 

1,986,897

 

General and administrative expenses (including share-based compensation of $110,241, $154,111, $533,892 and $518,988, respectively)

 

 

5,572,106

 

 

 

4,832,422

 

 

 

15,393,752

 

 

 

14,486,853

 

Depreciation and amortization

 

 

171,382

 

 

 

225,908

 

 

 

580,768

 

 

 

682,718

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

 

6,390,211

 

 

 

5,735,948

 

 

 

17,882,675

 

 

 

17,156,468

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

(204,628)

 

 

(460,636)

 

 

(252,610)

 

 

(1,985,393)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

68,191

 

 

 

83,439

 

 

 

257,350

 

 

 

226,209

 

Interest expense

 

 

(42,445)

 

 

(47,671)

 

 

(131,277)

 

 

(155,126)

Other income (expense), net

 

 

(70)

 

 

93

 

 

 

49,358

 

 

 

590

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total other income (expense), net

 

 

25,676

 

 

 

35,861

 

 

 

175,431

 

 

 

71,673

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAX PROVISION (BENEFIT)

 

 

(178,952)

 

 

(424,775)

 

 

(77,179)

 

 

(1,913,720)

INCOME TAX PROVISION (BENEFIT)

 

 

13,057

 

 

 

134,410

 

 

 

(28,551)

 

 

(12,013)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

$(192,009)

 

$(559,185)

 

$(48,628)

 

$(1,901,707)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER SHARE, BASIC AND DILUTED

 

$(0.02)

 

$(0.06)

 

$(0.00)

 

$(0.20)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED-AVERAGE SHARES OUTSTANDING, BASIC AND DILUTED

 

 

10,018,287

 

 

 

9,655,173

 

 

 

9,928,651

 

 

 

9,598,478

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DILUTED EARNINGS PER SHARE

 

$(0.02)

 

$(0.06)

 

$(0.00)

 

$(0.20)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING

 

 

10,018,287

 

 

 

9,655,173

 

 

 

9,928,651

 

 

 

9,598,478

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 
3

Table of Contents

 

WIDEPOINT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

 

 

 

THREE MONTHS ENDED

 

 

NINE MONTHS ENDED

 

 

 

SEPTEMBER 30,

 

 

SEPTEMBER 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

 

 

 (Unaudited)

 

NET LOSS

 

$(192,009)

 

$(559,185)

 

$(48,628)

 

$(1,901,707)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments, net of tax

 

 

(5,585)

 

 

410

 

 

 

(10,061)

 

 

91,361

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss):

 

 

(5,585)

 

 

410

 

 

 

(10,061)

 

 

91,361

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPREHENSIVE LOSS

 

$(197,594)

 

$(558,775)

 

$(58,689)

 

$(1,810,346)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 
4

Table of Contents

 

WIDEPOINT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

SEPTEMBER 30,

 

 

DECEMBER 31,

 

 

 

2026

 

 

2025

 

 

 

(Unaudited)

 

ASSETS

 

CURRENT ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$10,103,515

 

 

$9,818,503

 

Restricted cash

 

 

1,042,925

 

 

 

2,647,990

 

Accounts receivable, net of allowance for credit losses of $134,996 and $57,454, respectively

 

 

13,926,953

 

 

 

15,002,571

 

Unbilled accounts receivable

 

 

46,456,528

 

 

 

33,548,228

 

Other current assets

 

 

16,173,725

 

 

 

5,196,613

 

 

 

 

 

 

 

 

 

 

Total current assets

 

 

87,703,646

 

 

 

66,213,905

 

 

 

 

 

 

 

 

 

 

NONCURRENT ASSETS

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

331,649

 

 

 

480,082

 

Lease right of use asset

 

 

3,325,968

 

 

 

3,904,479

 

Intangible assets, net

 

 

2,554,282

 

 

 

3,352,296

 

Goodwill

 

 

5,811,578

 

 

 

5,811,578

 

Deferred tax assets, net

 

 

-

 

 

 

1,123

 

Other long-term assets

 

 

874,257

 

 

 

48,822

 

 

 

 

 

 

 

 

 

 

Total assets

 

$100,601,380

 

 

$79,812,285

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Accounts payable

 

$24,814,711

 

 

$25,891,150

 

Accrued expenses

 

 

43,572,673

 

 

 

31,159,173

 

Current portion of deferred revenue

 

 

15,835,046

 

 

 

6,114,402

 

Current portion of lease liabilities

 

 

771,493

 

 

 

751,233

 

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

84,993,923

 

 

 

63,915,958

 

 

 

 

 

 

 

 

 

 

NONCURRENT LIABILITIES

 

 

 

 

 

 

 

 

Lease liabilities, net of current portion

 

 

3,337,801

 

 

 

3,930,495

 

Deferred revenue, net of current portion

 

 

800,045

 

 

 

435,151

 

Deferred tax liabilities, net

 

 

15,496

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

89,147,265

 

 

 

68,281,604

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 16)

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value; 10,000,000 shares authorized; 2,045,714 shares issued and none outstanding

 

 

-

 

 

 

-

 

Common stock, $0.001 par value; 30,000,000 shares authorized; 10,028,316 and 9,892,565 shares issued and outstanding, respectively

 

 

10,029

 

 

 

9,894

 

Additional paid-in capital

 

 

103,715,779

 

 

 

103,733,790

 

Accumulated other comprehensive loss

 

 

(389,726)

 

 

(379,665)

Accumulated deficit

 

 

(91,881,967)

 

 

(91,833,338)

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

11,454,115

 

 

 

11,530,681

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$100,601,380

 

 

$79,812,285

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 
5

Table of Contents

 

WIDEPOINT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

NINE MONTHS ENDED

 

 

 

SEPTEMBER 30,

 

 

 

2026

 

 

2025

 

 

 

(Unaudited)

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net loss

 

$(48,628)

 

$(1,901,707)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Deferred income tax expense

 

 

10,200

 

 

 

50,200

 

Depreciation expense

 

 

597,013

 

 

 

699,768

 

Provision for credit losses

 

 

96,043

 

 

 

38,694

 

Amortization of intangibles

 

 

798,015

 

 

 

1,385,786

 

Share-based compensation expense

 

 

533,892

 

 

 

518,988

 

Non-cash lease expense

 

 

213,288

 

 

 

164,883

 

(Gain) loss on disposal of fixed assets

 

 

(49,043)

 

 

8,161

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable and unbilled receivables

 

 

(11,942,864)

 

 

6,784,375

 

Inventories

 

 

(8,459,836)

 

 

(712,121)

Other current assets

 

 

(2,520,191)

 

 

(1,542,224)

Other assets

 

 

(825,435)

 

 

161,150

 

Accounts payable and accrued expenses

 

 

11,383,901

 

 

 

(1,124,995)

Income tax payable

 

 

(76,746)

 

 

(55,111)

Deferred revenue and other liabilities

 

 

10,098,943

 

 

 

1,556,822

 

Other liabilities

 

 

(198,896)

 

 

(152,483)

 

 

 

 

 

 

 

 

 

Net cash (used in) provided by operating activities

 

 

(390,344)

 

 

5,880,186

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(85,537)

 

 

(140,918)

Proceeds from the sale of property and equipment

 

 

49,043

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

 

(36,494)

 

 

(140,918)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Advances on bank line of credit

 

 

-

 

 

 

2,800,000

 

Repayments of bank line of credit advances

 

 

-

 

 

 

(2,800,000)

Principal repayments under finance lease obligations

 

 

(353,521)

 

 

(412,299)

Withholding taxes paid on behalf of employees on net settled equity awards

 

 

(551,768)

 

 

(130,745)

 

 

 

 

 

 

 

 

 

Net cash used in financing activities

 

 

(905,289)

 

 

(543,044)

 

 

 

 

 

 

 

 

 

Net effect of exchange rate on cash

 

 

12,074

 

 

 

(52,334)

 

 

 

 

 

 

 

 

 

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

 

 

(1,320,053)

 

 

5,143,890

 

 

 

 

 

 

 

 

 

 

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period

 

 

12,466,493

 

 

 

7,817,395

 

 

 

 

 

 

 

 

 

 

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period

 

$11,146,440

 

 

$12,961,285

 

 

 

 

 

 

 

 

 

 

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH CONSISTED OF THE FOLLOWING:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$10,103,515

 

 

$12,128,422

 

Restricted cash

 

 

1,042,925

 

 

 

832,863

 

 

 

 

 

 

 

 

 

 

 

 

$11,146,440

 

 

$12,961,285

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 
6

Table of Contents

 

WIDEPOINT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

 

 

 

NINE MONTHS ENDED

 

 

 

SEPTEMBER 30,

 

 

 

2026

 

 

2025

 

 

 

(Unaudited)

 

SUPPLEMENTAL CASH FLOW INFORMATION

 

 

 

 

 

 

Cash paid for interest

 

$101,320

 

 

$121,221

 

Cash paid for income taxes

 

$-

 

 

$47,500

 

 

 

 

 

 

 

 

 

 

NONCASH INVESTING AND FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

ROU asset obtained in exchange for lease liability

 

$-

 

 

$542,232

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 
7

Table of Contents

 

WIDEPOINT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-In

 

 

Accumulated

 

 

Accumulated

 

 

 

 

 

 

Issued

 

 

Amount

 

 

Capital

 

 

OCI

 

 

Deficit

 

 

Total

 

 

 

(Unaudited)

 

Balance, January 1, 2025

 

 

9,485,508

 

 

$9,487

 

 

$103,103,653

 

 

$(450,945)

 

$(89,082,226)

 

$13,579,969

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock — restricted

 

 

78,396

 

 

 

78

 

 

 

(115,289)

 

 

-

 

 

 

-

 

 

 

(115,211)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock compensation expense — restricted

 

 

-

 

 

 

-

 

 

 

170,781

 

 

 

-

 

 

 

-

 

 

 

170,781

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock compensation expense — non-qualified stock options

 

 

-

 

 

 

-

 

 

 

28,078

 

 

 

-

 

 

 

-

 

 

 

28,078

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation — gain

 

 

-

 

 

 

-

 

 

 

-

 

 

 

26,105

 

 

 

-

 

 

 

26,105

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(724,063)

 

 

(724,063)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2025

 

 

9,563,904

 

 

$9,565

 

 

$103,187,223

 

 

$(424,840)

 

$(89,806,289)

 

$12,965,659

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock — restricted

 

 

91,269

 

 

 

91

 

 

 

(15,625)

 

 

-

 

 

 

-

 

 

 

(15,534)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock compensation expense — restricted

 

 

-

 

 

 

-

 

 

 

137,628

 

 

 

-

 

 

 

-

 

 

 

137,628

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock compensation expense — non-qualified stock options

 

 

-

 

 

 

-

 

 

 

28,390

 

 

 

-

 

 

 

-

 

 

 

28,390

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation — gain

 

 

-

 

 

 

-

 

 

 

 -

 

 

 

64,846

 

 

 

-

 

 

 

64,846

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(618,459)

 

 

(618,459)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2025

 

 

9,655,173

 

 

$9,656

 

 

$103,337,616

 

 

$(359,994)

 

$(90,424,748)

 

$12,562,530

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock compensation expense — restricted

 

 

 -

 

 

 

 -

 

 

 

108,369

 

 

 

 -

 

 

 

 -

 

 

 

108,369

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock compensation expense — non-qualified stock options

 

 

 -

 

 

 

 -

 

 

 

45,742

 

 

 

 -

 

 

 

 -

 

 

 

45,742

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation — gain

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

410

 

 

 

 -

 

 

 

410

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

(559,185)

 

 

(559,185)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, September 30, 2025

 

 

9,655,173

 

 

$9,656

 

 

$103,491,727

 

 

$(359,584)

 

$(90,983,933)

 

$12,157,866

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-In

 

 

Accumulated

 

 

Accumulated

 

 

 

 

 

 

Issued

 

 

Amount

 

 

Capital

 

 

OCI

 

 

Deficit

 

 

Total

 

 

 

(Unaudited)

 

Balance, January 1, 2026

 

 

9,892,565

 

 

$9,894

 

 

$103,733,790

 

 

$(379,665)

 

$(91,833,338)

 

$11,530,681

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Withholdings from vesting of restricted stock

 

 

(19,903)

 

 

(20)

 

 

(106,859)

 

 

-

 

 

 

-

 

 

 

(106,879)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock compensation expense — restricted

 

 

-

 

 

 

-

 

 

 

153,539

 

 

 

-

 

 

 

-

 

 

 

153,539

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock compensation expense — non-qualified stock options

 

 

-

 

 

 

-

 

 

 

95,278

 

 

 

-

 

 

 

-

 

 

 

95,278

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation — gain

 

 

-

 

 

 

-

 

 

 

-

 

 

 

607

 

 

 

-

 

 

 

607

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

76,960

 

 

 

76,960

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2026

 

 

9,872,662

 

 

$9,874

 

 

$103,875,748

 

 

$(379,058)

 

$(91,756,378)

 

$11,750,186

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock withheld related to net share settlement of equity awards

 

 

(43,268)

 

 

(44)

 

 

(308,324)

 

 

-

 

 

 

-

 

 

 

(308,368)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock — restricted stock

 

 

25,223

 

 

 

25

 

 

 

(25)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock — options cashless excercises

 

 

140,000

 

 

 

140

 

 

 

(140)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock compensation expense — restricted

 

 

-

 

 

 

-

 

 

 

105,178

 

 

 

-

 

 

 

-

 

 

 

105,178

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock compensation expense — non-qualified stock options

 

 

-

 

 

 

-

 

 

 

69,656

 

 

 

-

 

 

 

-

 

 

 

69,656

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation — (loss)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(5,083)

 

 

 

 

 

 

(5,083)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

66,420

 

 

 

66,420

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2026

 

 

9,994,617

 

 

$9,995

 

 

$103,742,093

 

 

$(384,141)

 

$(91,689,958)

 

$11,677,989

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock withheld related to net share settlement of equity awards

 

 

(20,443)

 

 

(20)

 

 

(136,501)

 

 

-

 

 

 

-

 

 

 

(136,521)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock — options cashless excercises

 

 

54,142

 

 

 

54

 

 

 

(54)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock compensation expense — restricted

 

 

-

 

 

 

-

 

 

 

72,877

 

 

 

-

 

 

 

-

 

 

 

72,877

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock compensation expense — non-qualified stock options

 

 

-

 

 

 

-

 

 

 

37,364

 

 

 

-

 

 

 

-

 

 

 

37,364

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation — (loss)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(5,585)

 

 

 

 

 

 

(5,585)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

(192,009)

 

 

(192,009)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, September 30, 2026

 

 

10,028,316

 

 

$10,029

 

 

$103,715,779

 

 

$(389,726)

 

$(91,881,967)

 

$11,454,115

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 
8

Table of Contents

 

WIDEPOINT CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

1. Organization and Nature of Operations

 

Organization

 

WidePoint Corporation (“WidePoint” or the “Company”) was incorporated in Delaware on May 30, 1997 and conducts operations through its wholly-owned operating subsidiaries throughout the continental United States, Ireland, the Netherlands and the United Kingdom. The Company’s principal executive and administrative headquarters is located in Fairfax, Virginia.

 

Nature of Operations

 

The Company is a leading provider of Technology Management as a Service (TMaaS). The Company’s TMaaS platform and service solutions enable its customers to efficiently secure, manage and analyze the entire lifecycle of their mobile technology assets through its federally compliant platform Intelligent Technology Management System (ITMS™). The Company’s ITMS platform is SSAE 18 compliant and was granted an Authority to Operate by the U.S. Department of Homeland Security. Additionally, the Company was granted an Authority to Operate by the General Services Administration with regard to its identity credentialing component of its TMaaS platform and the Company’s ITMS platform has received the FedRAMP Certified status. The Company’s TMaaS platform is internally hosted and accessible on-demand through a secure customer portal that is specially configured for each customer. The Company can deliver these solutions in a number of configurations ranging from utilizing the platform as a service to a full-service solution that includes full lifecycle support for all end users and the organization.

 

A significant portion of the Company’s expenses, such as personnel and facilities costs, are fixed in the short term and may not be easily modified to manage through changes in the Company’s marketplace that may create pressure on pricing and/or costs to deliver its services.

 

The Company has periodic capital expense requirements to maintain and upgrade its internal technology infrastructure tied to its hosted solutions and other such costs may be significant when incurred in any given quarter.

 

2. Basis of Presentation and Accounting Policies

 

Basis of Presentation

 

The unaudited condensed consolidated financial statements as of September 30, 2026 and for each of the three and nine month periods ended September 30, 2026 and 2025 included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Pursuant to such regulations, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted. It is the opinion of management that all adjustments (which include normal recurring adjustments) necessary for a fair statement of financial results are reflected in the financial statements for the interim periods presented. The condensed consolidated balance sheet as of December 31, 2025 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The results of operations for the three and nine month periods ended September 30, 2026 are not necessarily indicative of the operating results for the full year.

 

Principles of Consolidation

 

The accompanying condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries and acquired entities since their respective dates of acquisition. All significant inter-company amounts were eliminated in consolidation.

 

 
9

Table of Contents

 

 

Foreign Currency

 

Assets and liabilities denominated in foreign currencies are translated into U.S. dollars based upon exchange rates prevailing at the end of each reporting period. The resulting translation adjustments, along with any related tax effects, are included in accumulated other comprehensive income, a component of stockholders’ equity. Translation adjustments are reclassified to earnings upon the sale or substantial liquidation of investments in foreign operations. Revenues and expenses are translated at the average month-end exchange rates during the year. Gains and losses related to transactions in a currency other than the functional currency, including operations outside the U.S. where the functional currency is the U.S. dollar, are reported net in the Company’s condensed consolidated statements of operations, depending on the nature of the activity.

 

Use of Estimates

 

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The more significant areas requiring use of estimates and judgment relate to revenue recognition, allowance for credit losses, ability to realize intangible assets and goodwill, ability to realize deferred income tax assets, fair value of certain financial instruments and the evaluation of contingencies and litigation. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. There were no significant changes in accounting estimates used by management during the period.

 

Significant Accounting Policies

 

There were no significant changes in the Company’s significant accounting policies during the first nine months of 2026 from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 25, 2026.

 

Accounting Standards Update

 

Accounting Standards Adopted

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes – Improvements to Income Tax Disclosures, requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted. The Company adopted this guidance prospectively for the year ended December 31, 2025.

 

Accounting Standards under Evaluation

 

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income (Topic 220) Disaggregation of Income Statement Expenses (“ASU 2024-03”), to enhance the transparency and decision usefulness of financial information presented in the income statement by requiring disaggregated information about certain income statement expense line items. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is evaluating the impact of these new requirements on its income statement presentation and disclosures.

 

In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This ASU amends the guidance under ASC 350-40 for internal-use software. The amendment removes reference to development-stages, clarifies when capitalization may begin, and require entities to apply the property, plant and equipment disclosure requirements under ASC 360-10 to capitalized internal-use software costs. The ASU is effective for annual periods beginning after December 15, 2027, and for interim periods within those annual periods. Early adoption of ASU No. 2025-06 is permitted. The Company is evaluating the impact of these new requirements on its financial position, results of operations and cash flows.

 

 
10

Table of Contents

 

 

Reclassification

 

Certain prior period amounts have been revised to correct an immaterial misclassification in the previously issued consolidated financial statements related to certain interchange cash back rewards. These amounts were previously recorded as revenues but should have been recorded as reductions of cost of revenues. The revision had no impact on previously reported gross profit, loss from operations, net loss, or stockholders’ equity.

 

3. Accounts Receivable and Significant Concentrations

 

A significant portion of the Company’s receivables are billed under firm fixed price contracts with agencies of the U.S. federal government and similar pricing structures with several commercial entities. Accounts receivable consist of the following by customer type in the table below as of the periods presented:

 

 

 

SEPTEMBER 30,

 

 

DECEMBER 31,

 

 

 

2026

 

 

2025

 

 

 

(Unaudited)

 

U.S. Federal, State, and Local Government (1)

 

$10,372,554

 

 

$12,598,664

 

Commercial (2)

 

 

3,689,395

 

 

 

2,461,361

 

Gross accounts receivable

 

 

14,061,949

 

 

 

15,060,025

 

Less: allowances for credit losses (3)

 

 

134,996

 

 

 

57,454

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

$13,926,953

 

 

$15,002,571

 

 

(1) Government contracts are generally firm fixed price not to exceed arrangements with a term of five (5) years, which consists of a base year and four (4) annual option year renewals. Government receivables are billed under a single consolidated monthly invoice and are billed approximately thirty (30) to sixty (60) days in arrears from the date of service and payment is generally due within thirty (30) days of the invoice date. Government accounts receivable payments are often delayed due to administrative processing delays by the government agency, government shutdown, and continuing budget resolutions that may delay availability of contract funding, and/or administrative only invoice correction requests by contracting officers.

 

(2) Commercial contracts are generally fixed price arrangements with contract terms ranging from two (2) to three (3) years. Commercial accounts receivables are billed based on the underlying contract terms and conditions which generally have repayment terms that range from thirty (30) to ninety (90) days. Commercial receivables are stated at amounts due from customers net of an allowance for credit losses if deemed necessary.

 

(3) During the three and nine month periods ended September 30, 2026 and 2025, the Company did not recognize any material provisions or recoveries of existing provision for credit losses. The Company has not historically maintained an allowance for credit losses for its government customers as it has not experienced material or recurring credit losses and the nature and size of the contracts has not necessitated the Company’s establishment of such an allowance for credit losses.

 

 
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Significant Concentrations

 

The following table presents consolidated trade accounts receivable by significant customers as of the periods presented below:

 

 

 

SEPTEMBER 30,

 

 

DECEMBER 31,

 

 

 

2026

 

 

2025

 

 

 

As a % of

 

 

As a % of

 

Customer Type

 

Receivables

 

 

Receivables

 

 

 

(Unaudited)

 

U.S. Federal Government

 

 

74%

 

 

84%

 

The following table presents revenue by significant customers for each of the periods presented:

 

 

 

THREE MONTHS ENDED

 

 

NINE MONTHS ENDED

 

 

 

SEPTEMBER 30,

 

 

SEPTEMBER 30,

 

 

 

As a % of

 

 

As a % of

 

 

As a % of

 

 

As a % of

 

 

 

Revenue

 

 

Revenue

 

 

Revenue

 

 

Revenue

 

Customer Type

 

2026

 

 

2025

 

 

2026

 

 

2025

 

 

 

(Unaudited)

 

U.S. Federal Government (1)

 

 

86%

 

 

83%

 

 

85%

 

 

84%

U.S. State & Local and Foreign Governments

 

 

0.3%

 

 

0.4%

 

 

1.0%

 

 

1.1%

Commercial

 

 

13%

 

 

17%

 

 

14%

 

 

16%

 

(1) Sales to the U.S. federal government include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is the U.S. government.

 

Credit Risk

 

Financial instruments that potentially expose the Company to concentrations of credit risk consist principally of cash on deposit with financial institutions, the balances of which frequently exceed federally insured limits. If the financial institution with whom we do business were to be placed into receivership, we may be unable to access the cash we have on deposit with such institutions. If we are unable to access our cash and cash equivalents as needed, our financial position and ability to operate our business could be adversely affected. At September 30, 2026, the Company had deposits in excess of FDIC limits of approximately $8.8 million. The Company also maintains deposits with a financial institution in Ireland that are insured by the Central Bank of Ireland up to a maximum of €100,000 per financial institution. At September 30, 2026, the Company had foreign bank deposits in excess of insured limits of approximately €322,800.

 

4. Unbilled Accounts Receivable

 

Unbilled accounts receivable represent revenues earned but not invoiced to the customer at the balance sheet date due to either timing of invoice processing or delays due to fixed contractual billing schedules. A significant portion of our unbilled accounts receivable consist of carrier services and hardware and software products delivered but not invoiced at the end of the reporting period. At September 30, 2026 and December 31, 2025, 99% and 99%, respectively, of our unbilled receivables were related to the U.S. Federal Government.

 

 
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5. Other Current Assets and Accrued Expenses

 

Other current assets consisted of the following as of the dates presented below:

 

 

 

SEPTEMBER 30,

 

 

DECEMBER 31,

 

 

 

2026

 

 

2025

 

 

 

(Unaudited)

 

Inventories

 

$9,141,473

 

 

$682,005

 

Prepaid project costs

 

 

1,583,496

 

 

 

697,360

 

Deferred contract costs

 

 

3,521,573

 

 

 

2,993,272

 

Prepaid expenses and other assets

 

 

1,927,183

 

 

 

823,976

 

 

 

 

 

 

 

 

 

 

Total other current assets

 

$16,173,725

 

 

$5,196,613

 

 

Inventories generally consist of mobile devices and accessories and identity credential hardware components. Inventories are valued at the lower of cost, using first-in, first-out method, or net realizable value. The Company records a write-down for inventories which have become obsolete or are in excess of anticipated demand or net realizable value. For the three and nine-month periods ended September 30, 2026 and 2025, there were no inventory write-downs.

 

The increase in inventories consist primarily of $8.6 million of third-party hardware and other products purchased for resale to a customer and are stated at the lower of cost or net realizable value.

 

Accrued expenses consisted of the following as of the dates presented below:

 

 

 

SEPTEMBER 30,

 

 

DECEMBER 31,

 

 

 

2026

 

 

2025

 

 

 

(Unaudited)

 

Carrier service costs

 

$37,547,070

 

 

$25,759,570

 

Salaries and payroll taxes

 

 

2,044,200

 

 

 

2,012,510

 

Inventory purchases, consultants and other costs

 

 

3,941,223

 

 

 

3,269,533

 

U.S. income tax payable

 

 

22,910

 

 

 

89,390

 

Foreign income tax payable

 

 

17,270

 

 

 

28,170

 

 

 

 

 

 

 

 

 

 

Total accrued expenses

 

$43,572,673

 

 

$31,159,173

 

 

 
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6. Property and Equipment

 

Major classes of property and equipment consisted of the following as of the dates presented below:

 

 

 

SEPTEMBER 30,

 

 

DECEMBER 31,

 

 

 

2026

 

 

2025

 

 

 

(Unaudited)

 

Computer hardware and software

 

$2,937,923

 

 

$2,925,707

 

Furniture and fixtures

 

 

379,799

 

 

 

380,139

 

Leasehold improvements

 

 

275,684

 

 

 

279,762

 

Automobiles

 

 

80,972

 

 

 

136,651

 

Gross property and equipment

 

 

3,674,378

 

 

 

3,722,259

 

 

 

 

 

 

 

 

 

 

Less: accumulated depreciation

 

 

3,342,729

 

 

 

3,242,177

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

$331,649

 

 

$480,082

 

 

During the three and nine month periods ended September 30, 2026, property and equipment depreciation expense was approximately $106,400 and $255,570, respectively. During the three and nine month periods ended September 30, 2025 property and equipment depreciation expense was approximately $81,840 and $242,140, respectively.

 

During the three month period ended September 30, 2026, the Company did not dispose of any property and equipment. During the nine month period ended September 30, 2026, the Company sold fully depreciated property and equipment with historical cost and accumulated depreciation of $106,767 and received proceeds of $49,043.

 

During the three month period ended September 30, 2025, there were no material disposals of property and equipment. During the nine month period ended September 30, 2025, the Company disposed of property and equipment with historical cost of $775,000 and accumulated depreciation of $766,800 and recognized a loss on disposal of property and equipment of $8,200.

 

There were no changes in the estimated useful lives used to depreciate property and equipment during the three and nine month periods ended September 30, 2026 and 2025.

 

 
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7. Goodwill and Intangible Assets

 

The Company has recorded goodwill of $5,811,578 as of September 30, 2026 and December 31, 2025. There were no changes in the carrying amount of goodwill during the three and nine months ended September 30, 2026 and 2025.

 

Intangible assets consists of the following:

 

 

 

SEPTEMBER 30, 2026

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Carrying

 

 

Accumulated

 

 

Net Book

 

 

 

Amount

 

 

Amortization

 

 

Value

 

 

 

(Unaudited)

 

Customer Relationships

 

$2,392,000

 

 

$(1,196,000)

 

$1,196,000

 

Channel Relationships

 

 

2,628,080

 

 

 

(2,175,466)

 

 

452,614

 

Internally Developed Software

 

 

7,866,000

 

 

 

(7,703,690)

 

 

162,310

 

Trade Name and Trademarks

 

 

1,330,472

 

 

 

(587,114)

 

 

743,358

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$14,216,552

 

 

$(11,662,270)

 

$2,554,282

 

 

 

 

DECEMBER 31, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Carrying

 

 

Accumulated

 

 

Net Book

 

 

 

Amount

 

 

Amortization

 

 

Value

 

 

 

 

 

 

 

Customer Relationships

 

$2,392,000

 

 

$(1,016,600)

 

$1,375,400

 

Channel Relationships

 

 

2,628,080

 

 

 

(2,044,062)

 

$584,018

 

Internally Developed Software

 

 

7,866,000

 

 

 

(7,283,003)

 

$582,997

 

Trade Name and Trademarks

 

 

1,330,472

 

 

 

(520,591)

 

$809,881

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$14,216,552

 

 

$(10,864,256)

 

$3,352,296

 

 

The Company did not capitalize any internally developed software costs for the three and nine month periods ended September 30, 2026 and 2025.

 

There were no disposals of intangible assets during the three and nine month periods ended September 30, 2026 and 2025.

 

The aggregate amortization expense recorded for the three and nine month periods ended September 30, 2026 was approximately $256,600 and $798,000, respectively. The aggregate amortization expense recorded for the three and nine month periods ended September 30, 2025 was approximately $418,700 and $1,385,800, respectively.

 

 
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As of September 30, 2026, estimated annual amortization for intangible assets is approximately:

 

Remainder of 2026

 

$243,813

 

2027

 

 

540,153

 

2028

 

 

510,324

 

2029

 

 

373,453

 

2030

 

 

308,533

 

Thereafter

 

 

578,006

 

Total

 

$2,554,282

 

 

8. Credit Agreements

 

The Company has a Loan and Security Agreement (the “Loan”) and Promissory Note (the “Note,” and, together with the Loan, the “Agreements”) with Old Dominion National Bank. The Agreements provide for a $4,000,000 revolving line of credit facility (the “Credit Facility”) that matures on May 28, 2027.

 

Advances under the Credit Facility are subject to a borrowing base equal to the lesser of (i) $4,000,000 or (ii) 80% of billed accounts receivable less than 90 days outstanding. Interest accrues on the outstanding principal balance of the Credit Facility at an annual rate equal to the Prime Rate published in The Wall Street Journal, subject to a floor rate of 6.50%. Outstanding interest on the amount borrowed is payable monthly and all outstanding interest and principal is due on the maturity date. The Credit Facility includes customary covenants and events of default, including the following items that are measured annually: (i) a minimum tangible net worth of $2.0 million; (ii) a minimum annual EBITDA of $1.0 million and (iii) a ratio of current assets to current liabilities of not less than 1.0 to 1.0. The Company did not have an outstanding balance on its Credit Facility as of September 30, 2026. The Company was in compliance with its covenants at September 30, 2026.

 

9. Leases

 

Effective March 1, 2025, the Company entered into a new lease agreement to lease office space in the Hampton, Virginia area, that replaced its existing lease in Hampton, Virginia. The lease is for a term of seventy-six months, with a monthly rent obligation of $8,235, subject to annual rent increase of 3%. The operating lease resulted in the Company recording a leased right to use asset of $542,232 and associated liability.

 

10. Income Taxes

 

The Company’s effective tax rate was (7.3)% and 37.0% for the three and nine month periods ended September 30, 2026, respectively. The Company’s effective tax rate was (31.6)% and 1.0% for the three and nine month periods ended September 30, 2025, respectively. During the three month period ended September 30, 2026, the Company recognized excess tax benefits related to stock-based compensation of $0.1 million as a discrete tax benefit in the provision for income taxes. The Company also recorded an increase in its valuation allowance of $0.1 million against deferred tax assets related to stock-based compensation deductions, based on management’s assessment of the realizability of those deferred tax assets under ASC 740.

 

The difference in the effective tax rate and the U.S. federal statutory rate was primarily due to the full valuation allowance the Company maintains against its deferred tax assets and state minimum taxes in the United States. The effective tax rate is calculated by dividing the income tax provision (benefit) by the income (loss) before income tax provision (benefit).

 

 
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11. Stockholders’ Equity

 

Common Stock

 

The Company is authorized to issue 30,000,000 shares of common stock, $.001 par value per share. As of September 30, 2026, there were 10,028,316 shares issued and outstanding.

 

No shares of common stock were issued under the vesting terms of restricted stock awards (RSAs) during the three months ended September 30, 2026.

 

During the nine months ended September 30, 2026, 174,619 shares of restricted common stock vested in accordance with the vesting terms of the RSAs. Certain employees received less than the shares vested because they elected to have a total of 22,621 shares withheld in satisfaction of the employees corresponding tax liability of approximately $134,874. The Company’s payment of this tax liability was recorded as a cash flow from financing activity on the condensed consolidated statement of cash flows.

 

No shares of common stock were issued under the vesting terms of RSAs during the three months ended September 30, 2025.

 

During the nine months ended September 30, 2025, 197,933 shares of restricted common stock vested in accordance with the vesting terms of the RSAs. Certain employees received less than the shares vested because they elected to have a total of 28,268 shares withheld in satisfaction of the employees corresponding tax liability of approximately $130,618. The Company’s payment of this tax liability was recorded as a cash flow from financing activity on the condensed consolidated statement of cash flows.

 

During the three month period ended September 30, 2026, employees exercised stock options covering 54,142 shares of common stock. The exercises were completed through net-share settlement arrangements. The Company withheld 20,443 shares with a value sufficient to satisfy the aggregate exercise price and employee tax withholding requirements and issued 33,699 net shares to employees. The fair value of shares withheld totaled approximately $136,521. The withheld shares were recorded as a reduction of stockholders' equity.

 

During the nine month period ended September 30, 2026, employees exercised stock options covering 194,142 shares of common stock. The exercises were completed through net-share settlement arrangements. The Company withheld 60,993 shares with a value sufficient to satisfy the aggregate exercise price and employee tax withholding requirements and issued 133,149 net shares to employees. The fair value of shares withheld totaled approximately $416,890. The withheld shares were recorded as a reduction of stockholders' equity.

 

There were no stock option exercises during the three and nine months ended September 30, 2025.

 

 
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Table of Contents

 

12. Share-based Compensation

 

Share-based compensation (including RSAs) represents both stock option-based expense and stock grant expense. The following table sets forth the composition of stock compensation expense included in general and administrative expense for the periods then ended:

 

 

 

THREE MONTHS ENDED

 

 

NINE MONTHS ENDED

 

 

 

SEPTEMBER 30,

 

 

SEPTEMBER 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

 

 

(Unaudited)

 

Restricted share-based compensation expense

 

$72,877

 

 

$108,369

 

 

$331,594

 

 

$416,778

 

Non-qualified option share-based compensation expense

 

 

37,364

 

 

 

45,742

 

 

 

202,298

 

 

 

102,210

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total share-based compensation before taxes

 

$110,241

 

 

$154,111

 

 

$533,892

 

 

$518,988

 

 

Restricted Stock

 

The Company records the fair value of all restricted stock shares based on the grant date fair value and amortizes stock compensation on a straight-line basis over the vesting period. Restricted stock award shares are issued when granted and included in the total number of common shares issued and outstanding. There were no RSAs granted during the three month period ended September 30, 2026. During the nine month period ended September 30, 2026, the Company granted 25,223 restricted stock awards. During the three and nine month periods ended September 30, 2025, the Company granted 71,291 restricted stock awards.

 

Stock Options

 

The Company estimates the fair value of nonqualified stock awards using a Black-Scholes Option Pricing model (“Black-Scholes model”). The fair value of each stock award is estimated on the date of grant using the Black-Scholes model, which requires an assumption of dividend yield, risk free interest rates, volatility, and expected option life. The risk-free interest rates are based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. Expected volatilities are based on the historical volatility of our common stock over the expected option term. The expected term of options granted is calculated using the simplified method. The Company recognizes forfeitures as they occur. There were no stock option grants during the three month period ended September 30, 2026. There were 100,000 stock option awards granted during the nine month period ended September 30, 2026. There were 120,000 stock option awards granted during the three and nine month periods ended September 30, 2025.

 

For the nine month period ended September 30, 2026, the weighted-average grant date fair value per option was $0.68 - $2.51. For the three and nine month periods ended September 30, 2025, the weighted-average grant date fair value per option was $1.89. Option pricing model assumptions for NQSO awards granted were valued using the following assumptions for the period then ended as set forth below:

 

 

 

THREE MONTHS ENDED

 

 

NINE MONTHS ENDED

 

 

 

SEPTEMBER 30,

 

 

SEPTEMBER 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

 

 

(Unaudited)

 

Expected dividend yield

 

 

--

 

 

 

0%

 

 

0%

 

 

0%

Expected volatility

 

 

--

 

 

 

62.6%

 

 

66.8%

 

 

62.6%

Risk-free interest rate

 

 

--

 

 

 

3.8%

 

 

3.6%

 

 

3.8%

Term

 

 

--

 

 

4.5 years

 

 

1.8 years

 

 

4.5 years

 

 

At September 30, 2026, the Company had approximately $0.3 million of total unrecognized share-based compensation expense related to share-based compensation that will be recognized over the weighted average remaining period of 0.9 years.

 

 
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13. Earnings (Loss) Per Common Share (EPS)

 

The computations of basic and diluted earnings (loss) per share were as follows for the periods presented below:

 

 

 

THREE MONTHS ENDED

 

 

NINE MONTHS ENDED

 

 

 

SEPTEMBER 30,

 

 

SEPTEMBER 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

 

 

(Unaudited)

 

Basic and Diluted Loss Per Share Computation:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$(192,009)

 

$(559,185)

 

$(48,628)

 

$(1,901,707)

Weighted average number of common shares

 

 

10,018,287

 

 

 

9,655,173

 

 

 

9,928,651

 

 

 

9,598,478

 

Basic and Diluted Loss Per Share

 

$(0.02)

 

$(0.06)

 

$(0.00)

 

$(0.20)

 

For the three and nine months ended September 30, 2026, the Company had unexercised stock options of 249,428 that were anti-dilutive.

 

For the three and nine months ended September 30, 2025, the Company had unexercised stock options of 408,570 and warrants to purchase 150,000 shares of common stock, outstanding, that were anti-dilutive.

 

14. Revenue from Contracts with Customers

 

The following table was prepared to provide additional information about the composition of revenues from contracts with customers for the periods presented:

 

 

 

THREE MONTHS ENDED

 

 

NINE MONTHS ENDED

 

 

 

SEPTEMBER 30,

 

 

SEPTEMBER 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

 

 

(Unaudited)

 

Carrier Services

 

$26,320,968

 

 

$20,406,680

 

 

$76,169,864

 

 

$65,031,044

 

Managed Services

 

 

18,745,940

 

 

 

15,120,269

 

 

 

47,472,656

 

 

 

41,289,753

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$45,066,908

 

 

$35,526,949

 

 

$123,642,520

 

 

$106,320,797

 

 

 
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The Company recognized revenues from contracts with customers for the following customer types as set forth below:

 

 

 

THREE MONTHS ENDED

 

 

NINE MONTHS ENDED

 

 

 

SEPTEMBER 30,

 

 

SEPTEMBER 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

 

 

(Unaudited)

 

U.S. Federal Government

 

$38,857,478

 

 

$29,495,102

 

 

$105,632,647

 

 

$89,228,492

 

U.S. State and Local Governments

 

 

132,956

 

 

 

132,926

 

 

 

315,897

 

 

 

349,328

 

Foreign Governments

 

 

11,468

 

 

 

13,699

 

 

 

33,282

 

 

 

50,444

 

Commercial Enterprises

 

 

6,065,006

 

 

 

5,885,222

 

 

 

17,660,694

 

 

 

16,692,533

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$45,066,908

 

 

$35,526,949

 

 

$123,642,520

 

 

$106,320,797

 

 

The Company recognized revenues from contracts with customers in the following geographic regions:

 

 

 

THREE MONTHS ENDED

 

 

NINE MONTHS ENDED

 

 

 

SEPTEMBER 30,

 

 

SEPTEMBER 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

 

 

(Unaudited)

 

United States

 

$44,087,897

 

 

$34,437,757

 

 

$120,703,842

 

 

$103,151,151

 

Europe

 

 

979,011

 

 

 

1,089,192

 

 

 

2,938,678

 

 

 

3,169,646

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$45,066,908

 

 

$35,526,949

 

 

$123,642,520

 

 

$106,320,797

 

 

During the three month periods ended September 30, 2026 and 2025, the Company recognized approximately $0.7 million and $0.7 million, respectively, of revenue related to amounts that were included in deferred revenue as of December 31, 2025 and 2024, respectively.

 

During the nine month periods ended September 30, 2026 and 2025, the Company recognized approximately $5.6 million and $5.9 million, respectively, of revenue related to amounts that were included in deferred revenue as of December 31, 2025 and 2024, respectively.

 

DHS CWMS 3.0 contract

 

On June 24, 2026, the Department of Homeland Security ("DHS") awarded the Cellular Wireless Managed Services ("CWMS") 3.0 contract to the Company. On June 29, 2026, the Company was notified of a post-award protest filed with the U.S. Government Accountability Office ("GAO") challenging the award.

 

On September 24, 2026, the GAO sustained the protest recommending that DHS reevaluate the proposals, reopen discussions if appropriate, and make a new contract award determination. Subsequent to September 30, 2026, DHS has requested revised proposals, and WidePoint has submitted a revised proposal for evaluation by DHS. The Company awaits DHS’s announcement of the results of its evaluation and the resulting award decision.

 

The timing and outcome of the reevaluation remain uncertain, and any subsequent award may be subject to further protest. There can be no assurance that the Company will ultimately be awarded the CWMS 3.0 contract award.

 

For the nine months ended September 30, 2026, the CWMS contract generated revenues of $98.9 million and gross profit of $6.8 million, representing approximately 80.0% and 38.7% of the Company's consolidated revenues and gross profit, respectively. For the three months ended September 30, 2026, the contract generated revenues of $36.7 million and gross profit of $2.5 million, representing approximately 81.4% and 42.1% of consolidated revenues and gross profit, respectively.

 

 
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15. Segment Information

 

Segments are defined by authoritative guidance as components of a company in which separate financial information is available and is evaluated by the chief operating decision maker (CODM), or a decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM is the chief executive officer and is responsible for reviewing segment performance and making decisions regarding resource allocation.

 

The Company operates as one segment based on the consolidated information used by its CODM in evaluating the financial performance of its business and allocating resources. This single segment represents the Company’s business, WidePoint, which is providing managed services for government and commercial clients that include Identity Management (IdM), secure Mobility Managed Services (MMS), Telecom Lifecycle Management, Digital Billing & Analytics and IT as a service (ITaaS). The Company presents a single segment for purposes of financial reporting and prepares consolidated financial statements upon that basis.

 

The CODM assesses performance for the reporting segment and decides how to allocate resources based on consolidated revenue, gross profit and net income (loss), which also is reported on the Consolidated Statement of Operations, in addition to other key financial indicators, including gross margin, guiding strategic decisions to align with company-wide goals. The CODM uses the performance measures and key financial indicators in managing the business, allocating resources, making operating decisions, assessing financial performance, and making investment decisions such as acquisitions.

 

The measure of segment assets is reported on the balance sheet as total consolidated assets. In addition, substantially all of the Company's revenues and long-lived assets are attributable to operations is in the United States for all periods presented.

 

The following table reflects certain financial data for our reportable segment:

 

 

 

THREE MONTHS ENDED

 

 

NINE MONTHS ENDED

 

 

 

SEPTEMBER 30,

 

 

SEPTEMBER 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

 

 

(Unaudited)

 

REVENUES

 

$45,066,908

 

 

$35,526,949

 

 

 

123,642,520

 

 

$106,320,797

 

Carrier services cost

 

 

(25,788,374)

 

 

(19,569,122)

 

 

(74,260,420)

 

 

(63,710,963)

Managed service costs

 

 

(12,831,472)

 

 

(10,258,104)

 

 

(30,938,505)

 

 

(26,035,923)

Depreciation and amortization

 

 

(432,861)

 

 

(650,319)

 

 

(1,395,028)

 

 

(2,085,554)

Stock based compensation

 

 

(110,241)

 

 

(154,111)

 

 

(533,892)

 

 

(518,988)

Other segment items (1)

 

 

(6,108,588)

 

 

(5,355,929)

 

 

(16,767,285)

 

 

(15,954,762)

Interest expense

 

 

(42,445)

 

 

(47,671)

 

 

(131,277)

 

 

(155,126)

Interest income

 

 

68,191

 

 

 

83,439

 

 

 

257,350

 

 

 

226,209

 

Other income (expense)

 

 

(70)

 

 

93

 

 

 

49,358

 

 

 

590

 

Income tax (provision) benefit

 

 

(13,057)

 

 

(134,410)

 

 

28,551

 

 

 

12,013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS FOR THE PERIOD:

 

$(192,009)

 

$(559,185)

 

 

(48,628)

 

$(1,901,707)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Other segment items include sales and marketing costs, general, and administration expenses.

 

 
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16. Commitments and Contingencies

 

Employment Agreements

 

The Company has employment agreements with certain executives that set forth compensation levels and provide for severance payments in certain instances.

 

Litigation

 

The Company is involved in various legal proceedings arising in the ordinary course of business. Management does not believe that the outcome of these matters, individually or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations, or cash flow.

 

17. Subsequent Events

 

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Other than matters disclosed in Note 14, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements.

 

 
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Table of Contents

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

Cautionary Note Regarding Forward-Looking Statements

 

This Quarterly Report on Form 10-Q contains forward-looking statements concerning our business, operations and financial performance and condition as well as our plans, objectives and expectations for our business operations and financial performance and condition that are subject to risks and uncertainties. All statements other than statements of historical fact included in this Form 10-Q are forward-looking statements. You can identify these statements by words such as “aim,” “anticipate,” “assume,” “believe,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “potential,” “positioned,” “predict,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends. These forward-looking statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management's beliefs and assumptions. These statements are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including:

 

 

·

The potential loss of the Department of Homeland Security's (DHS) Cellular Wireless Managed Services (CWMS) 3.0 contract award, a 10-year Indefinite Delivery, Indefinite Quantity (IDIQ) contract, resulting from the Government Accountability Office's (GAO) decision sustaining a protest of the award, DHS's ongoing reevaluation process, or any subsequent protests.

 

·

Our market is highly competitive and we may not be able to compete effectively or gain market acceptance of our products and service.

 

·

Unfavorable customer or vendor contract terms, inadequate pricing, or poorly defined contractual obligations could result in increased costs, reduced profitability, disputes or financial losses.

 

·

Failure to adequately manage vendor and subcontractor relationships, supply chain risks, or compliance with government contracting requirements could result in performance disruptions, penalties or the loss of contracts.

 

·

Delays, performance difficulties or termination of significant customer contracts, including contracts involving substantial implementation activities, could adversely affect anticipated revenues and profitability and result in write-offs of deferred costs.

 

·

Delays in billing or collecting significant unbilled receivables and contract assets could adversely affect our liquidity, cash flows and financial condition.

 

·

We may not be able to respond to rapid technological changes with new software products and services, especially in the area of artificial intelligence, which could harm our sales and profitability and our competitiveness in the market.

 

·

Tariffs, inflationary pressures, including cloud computing, data processing and other technology resources, and other macroeconomic forces that impact costs, such as costs for devices, labor and distribution costs may impact our financial condition or results of operations.

 

·

Our financial resources are limited and the failure of one or more new product or service offerings could materially harm our financial results.

 

·

We have significant fixed operating costs, which may be difficult to adjust in response to unanticipated fluctuations in revenues.

 

·

We have incurred net losses in the past and may incur net losses in the future.

 

·

Federal agencies and certain large customers can unexpectedly terminate their contracts with us at any time without penalty and the loss of a large customer would have an adverse impact on our financial results.

 

·

The loss of key personnel or an inability to attract and retain additional personnel may impair our ability to grow our business.

 

·

Acquisitions we undertake may present integration challenges, fail to perform as expected, increase our liabilities, and/or reduce our earnings.

 

·

Federal government contracts contain provisions giving government customers a variety of rights that are unfavorable to us, including the ability to audit us and/or assess fines and/or penalties for non-compliance.

 

·

Federal government shutdowns, the failure of the Federal government to approve a budget or reduction in government spending in the areas in which we serve could have a negative impact on our cash flows.

 

·

Our inability to access our working capital line of credit or otherwise maintain compliance with the required covenants would have an adverse impact on our financial condition.

 

·

Security breaches or cybersecurity events could result in the loss of customers and negative publicity and materially harm our business.

 

·

Actual or perceived breaches of our security measures, or governmental required disclosure of customer information could diminish demand for our solution and subject us to substantial liability.

 

·

The negative impact of any catastrophic events, including acts of domestic or international terrorism, civil unrest, pandemics, outbreak of war or hostilities, and other regional conflicts, adverse climate or weather events or other public health emergencies, as well as our response to any of the aforementioned factors and

 

·

The risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 25, 2026.

  

The forward-looking statements included in this Form 10-Q are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. Readers are cautioned not to put undue reliance on forward-looking statements. In this Quarterly Report on Form 10-Q, unless the context indicates otherwise, the terms “Company” and “WidePoint,” as well as the words “we,” “our,” “ours” and “us,” refer collectively to WidePoint Corporation and its consolidated subsidiaries.

 

Business Overview

 

We are a leading provider of Technology Management as a Service (TMaaS) that consists of federally certified communications management, identity management, and interactive bill presentment and unified communication analytics solutions and IT as a Service (ITaaS). We help our clients achieve their organizational missions for mobility management and security objectives in this challenging and complex business environment.

 

 
23

Table of Contents

 

We offer our TMaaS solutions through a flexible “As-a-Service” model or “XaaS” which includes both a scalable and comprehensive set of functional capabilities that can be used by any customer to meet the most common functional, technical and security requirements for mobility management. Our TMaaS solutions were designed and implemented with flexibility in mind such that it can accommodate a large variety of customer requirements through simple configuration settings rather than through costly software development. The flexibility of our TMaaS solutions enables our customers to be able to quickly expand or contract their mobility management requirements. Our TMaaS solutions are hosted and accessible on-demand through a secure federal government certified proprietary portal that provides our customers with the ability to manage, analyze and protect their valuable communications assets, and deploy identity management solutions that provide secured virtual and physical access to restricted environments.

 

We have experienced increased competition from government-operated services and internal agency capabilities. Certain federal agency customers have migrated to government-wide shared identity and credential management services, including the General Services Administration's USAccess program. In addition, some federal agencies have developed or expanded internal capabilities to perform telecommunications management services that have historically been provided by outside contractors, including the Company. Although the revenue impact of individual customer losses has not been material, continued migration to government-operated services or increased reliance on internal agency resources could reduce demand for our solutions and adversely affect future revenues and profitability.

 

For additional information related to our business operations, see the description of our business set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 25, 2026.

 

Third Quarter Highlights

 

On June 29, 2026, the Company was notified that a post-award protest had been filed with the U.S. Government Accountability Office ("GAO") challenging the award to the Company of the Department of Homeland Security for Cellular Wireless Managed Services (CWMS) 3.0 ID/IQ Contract.

 

On September 24, 2026, the GAO sustained the protest, recommending that DHS reevaluate the proposals, reopen discussions if appropriate, and make a new contract award determination. Subsequent to September 30, 2026, DHS has requested revised proposals, and WidePoint has submitted a revised proposal for evaluation by DHS. The Company awaits DHS’s announcement of the results of its evaluation and the resulting award decision. There can be no assurance that the Company will ultimately retain the CWMS 3.0 contract award.

 

Strategic Focus

 

Our longer-term strategic focus and goals are driven by our need to expand our critical mass so that we have more flexibility to fund investments in technology solutions and introduce new sales and marketing initiatives in order to expand our marketplace share and increase the breadth of our offerings in order to improve company sustainability and growth.

 

In fiscal 2026, we will continue to focus on the goals identified in our Annual Report on Form 10-K as well as the following:

 

 

■

Capturing LA 28 Device as a Service project with our strategic partner CDW,

 

■

Capture DaaS with companies that will improve the Company’s overall gross margins,

 

■

Fully implement our cellular carrier Platform as a Service PSaaS contract for its government customers and capture additional cellular carrier commercial contracts,

 

■

Capture new task orders under our other government wide contract (GWAC) vehicles, e.g. NASA SEWP 6, Navy Spiral 4,

 

■

Capture new GWAC vehicles, and

 

■

Improve EPS metric.

  

 
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Table of Contents

 

Results of Operations

Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025

 

Revenues. Revenues for the three months ended September 30, 2026 were $45.0 million, an increase of $9.5 million (or 26.9%) compared to $35.5 million in the same period in 2025. Our mix of revenues for the periods presented is set forth below:

 

 

 

THREE MONTHS ENDED

 

 

 

 

 

 

SEPTEMBER 30,

 

 

Dollar

 

 

 

2026

 

 

2025

 

 

Variance

 

 

 

 

 

 

 

 

 

Carrier Services

 

$26,320,960

 

 

$20,406,680

 

 

$5,914,280

 

Managed Services:

 

 

 

 

 

 

 

 

 

 

 

 

Managed Service Fees

 

 

10,888,698

 

 

 

9,493,762

 

 

 

1,394,936

 

Billable Service Fees

 

 

1,162,636

 

 

 

1,280,704

 

 

 

(118,068)

Reselling and Other Services

 

 

6,694,614

 

 

 

4,345,803

 

 

 

2,348,811

 

Total Managed Services:

 

 

18,745,948

 

 

 

15,120,269

 

 

 

3,625,679

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$45,066,908

 

 

$35,526,949

 

 

$9,539,959

 

 

Managed Service Revenues. Total managed services revenue was $18.7 million, an increase of $3.6 million compared with $15.1 million in the same period in 2025 as follows:

 

 

·

Our managed service fees increased by $1.4 million to $10.9 million for the three months ended September 30, 2026 compared to $9.5 million in the same period in the prior year. The increase is primarily due the additional task order with the Customs and Border Protection in September of 2025 to manage 30,000 phone lines

 

 

 

 

·

Our billable service fees were $1.2 million and $1.3 million for the three months ended September 30, 2026 and 2025, respectively, which is relatively consistent.

 

 

 

 

·

Reselling and other services increased by $2.3 million to $6.6 million for the three months ended September 30, 2026, compared to $4.3 million for the same period in the prior year. The increase was primarily driven by a sale of deployable communications kits consisting of laptop computers, specialized protective cases and satellite connectivity equipment, referred to as "Digital Sea Bags." to the US Coast Guard.

  

Carrier Service Revenues. We also procure, process and pay communications carrier invoices on behalf of customers. Under many of our carrier services arrangements, we recognize revenues and related costs on a gross basis. A significant portion of our overall reported revenue consists of revenue from carrier services; however, it represents an insignificant portion of our overall reported gross profit. This is a commodity type service and margins are nominal, but this is a necessary service to deliver to federal government customers that engage us to provide a full-service solution. Our carrier services revenue was $26.3 million, an increase of $5.9 million, as compared with the same period in 2025. The increase in carrier services revenues over the same period last year is a result of the growth in the number of phone lines under management during the second half of 2025 for our DHS customer.

 

Cost of Revenues. Our cost of revenues include employee labor, excluding fringe benefit costs, and subcontractors directly associated with satisfying customer performance obligations, cash back rewards received associated with vendor payments made on behalf of customers, and the associated cost of products and third-party software that we resell to our end customers. Cost of revenues also includes depreciation and amortization of capitalized software related to delivering our solutions. Cost of revenues for the three months ended September 30, 2026 were $39.0 million (or 87% of revenues), an increase of $8.7 million from $30.3 million (or 85% of revenues) in the same period in 2025. Included in cost of revenues is carrier costs paid on behalf of our federal government customers of approximately $25.8 million and $19.6 million for the three months ended September 30, 2026 and 2025, respectively.

 

Gross Profit. Gross profit for the three month period ended September 30, 2026 increased on a dollar basis by $0.9 million to $6.2 million (or 14% of revenues), compared to $5.3 million (or 15% of revenues) in the same period in 2025.

 

 
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Table of Contents

 

Gross profit attributable to carrier services revenue (excluding managed services), for the three-months ended September 30, 2026 was 2% compared to 4% in the same period last year, the gross profit reflected related to carrier services results from fees received from third party payment platforms associated with vendor payments made on behalf of customers. Gross profit as a percentage of managed services revenue (excluding carrier services) for the three months ended September 30, 2026 and 2025 was 30% and 29%, respectively.

 

 

 

THREE MONTHS ENDED

 

 

 

 

 

SEPTEMBER 30,

 

 

Dollar

 

 

 

2026

 

 

2025

 

 

Variance

 

Revenues:

 

 

 

 

 

 

 

 

 

Carrier Services

 

$26,320,960

 

 

$20,406,680

 

 

$5,914,280

 

Managed Services

 

 

18,745,948

 

 

 

15,120,269

 

 

 

3,625,679

 

Total revenue

 

 

45,066,908

 

 

 

35,526,949

 

 

 

9,539,959

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

 

Carrier Services

 

 

532,586

 

 

 

837,558

 

 

 

(304,972)

Managed Services

 

 

5,652,997

 

 

 

4,437,754

 

 

 

1,215,243

 

Total gross profit

 

 

6,185,583

 

 

 

5,275,312

 

 

 

910,271

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Margin:

 

 

 

 

 

 

 

 

 

 

 

 

Carrier Services

 

 

2%

 

 

4%

 

 

 

 

Managed Services

 

 

30%

 

 

29%

 

 

 

 

Total gross margin

 

 

14%

 

 

15%

 

 

 

 

 

Sales and Marketing. Sales and marketing expenses include employee labor, excluding fringe benefit costs, and sales commissions associated with our sales force, commission fees paid to non-employee sales agents and partners, and costs associated with travel and trade shows. Sales and marketing expense for the three months ended September 30, 2026 was $0.6 million (or 1% of revenues) and remained relatively consistent compared to $0.7 million (or 2% of revenues) in 2025.

 

General and Administrative. General and administrative expenses include employees in finance, human resources, information technology, and other administrative support functions; employee labor not associated with any single revenue producing activity, all company fringe benefits, including paid time off, employee health and medical insurance, 401k matching contributions, and payroll taxes. General and administrative expenses also include professional services to include audit, consulting, outside legal, and outsourcing services. Certain of these expenses, including those associated with the operation of our technical infrastructure as well as components of our operating expenses, are generally less variable in nature and may not correlate to the changes in revenue. General and administrative expenses for the three months ended September 30, 2026 were $5.6 million (or 12% of revenues) compared to $4.8 million (or 14% of revenues) in 2025. The increase was partially offset by approximately $0.6 million of internal IT labor costs that are typically reflected within general and administrative expenses but were reassigned during the current period to implementation activities associated with a long-term customer contract. These costs were deferred during the period in connection with implementation activities under the long-term customer contract. Because the implementation services do not represent a distinct performance obligation, the related revenue and costs are deferred and will be recognized over the contract term.

 

Excluding the impact of these deferred implementation costs, operating expenses would have increased more significantly period over period. Upon go-live, the deferred costs will be amortized to cost of sales over the contract term. To the extent internal IT personnel continue to perform billable customer work after go-live, related labor costs are expected to be classified as direct costs rather than general and administrative expenses.

 

 
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Table of Contents

 

We expect to incur additional costs in future periods related to our move from a smaller reporting company to an accelerated filer, including increased external audit fees, consulting services, additional personnel and other compliance-related expenditures. Based on current estimates, these incremental costs are expected to approximate $0.8 million during the second half of 2026.

 

We also expect to incur certain compensation costs associated with previously approved employee incentive arrangements that are contingent upon the final resolution of the protest process with respect to our CWMS 3.0 award. These arrangements include up to approximately $0.6 million of cash incentive compensation expected to be paid upon satisfaction of the applicable performance condition, as well as up to approximately $0.4 million of stock-based compensation that would be recognized over the applicable requisite service periods following satisfaction of the performance condition. The timing, amount and financial statement impact of these costs will depend on the outcome and timing of the protest process, the final terms of the award, employee service requirements, forfeitures, and other factors. Accordingly, there can be no assurance as to the timing or amount of any future compensation expense.

 

Depreciation and Amortization. Depreciation and amortization expense for the three months ended September 30, 2026 was $171,400 as compared to $225,900 in 2025.

 

Other Income (Expense), Net. Other income, net for the three months ended September 30, 2026 was $25,700 which is consistent as compared to other income, net of $35,900 in 2025.

 

Income Taxes. Income tax provision for the three months ended September 30, 2026 was $13,100 as compared to income tax provision of $134,400 in 2025.

 

Net Loss. As a result of the cumulative factors described above, net loss for the three months ended September 30, 2026 decreased by $367,200 to $192,000 compared to net loss of $559,200 for the three months ended September 30, 2025.

 

Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025

 

Revenues. Revenues for the nine months ended September 30, 2026 were $123.6 million, an increase of $17.3 million (or 16%) compared to $106.3 million in the same period in 2025. Our mix of revenues for the periods presented is set forth below:

 

 

 

NINE MONTHS ENDED

 

 

 

 

 

 

SEPTEMBER 30,

 

 

Dollar

 

 

 

2026

 

 

2025

 

 

Variance

 

 

 

 

 

 

 

 

 

Carrier Services

 

$76,169,860

 

 

$65,031,039

 

 

$11,138,821

 

Managed Services:

 

 

 

 

 

 

 

 

 

 

 

 

Managed Service Fees

 

 

29,866,805

 

 

 

26,667,050

 

 

 

3,199,755

 

Billable Service Fees

 

 

3,672,681

 

 

 

4,350,543

 

 

 

(677,862)

Reselling and Other Services

 

 

13,933,174

 

 

 

10,272,165

 

 

 

3,661,009

 

Total Managed Services:

 

 

47,472,660

 

 

 

41,289,758

 

 

 

6,182,902

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$123,642,520

 

 

$106,320,797

 

 

$17,321,723

 

 

 
27

Table of Contents

 

Managed Service Revenues. Total managed services revenue was $47.5 million, an increase of $6.2 million compared with $41.3 million in the same period in 2025 as follows:

 

 

·

Our managed service fees increased by $3.2 million to $29.9 million for the nine months ended September 30, 2026 compared to $26.7 million in the same period in the prior year. The increase is primarily due to an additional task order with the Customs and Border Protection in September of 2025 to manage 30,000 phone lines

 

 

 

 

·

Our billable service fees were $3.7 million, which is $0.7 million lower compared to the same period last year. Billable service fees were adversely impacted by the partial shutdown of the DHS beginning February 2026, which resulted in reduced billable activity on certain contracts.

 

 

 

 

·

Reselling and other services increased by $3.6 million to $14.0 million for the nine months ended September 30, 2026, compared to $10.3 million for the same period in the prior year. The increase was primarily driven by a sale of deployable communications kits consisting of laptop computers, specialized protective cases and satellite connectivity equipment, referred to as "Digital Sea Bags." to the US Coast Guard.

 

Carrier Service Revenues. Our carrier services revenue was $76.2 million, an increase of $11.1 million, as compared with the same period in 2025. The increase in carrier services revenues over the same period last year is a result of the growth in the number of phone lines under management during the second half of 2025 for our DHS customer.

 

Cost of Revenues. Our cost of revenues include employee labor, excluding fringe benefit costs, and subcontractors directly associated with satisfying customer performance obligations, cash back rewards received associated with vendor payments made on behalf of customers, and the associated cost of products and third-party software that we resell to our end customers. Cost of revenues also includes depreciation and amortization of capitalized software related to delivering our solutions. Cost of revenues for the nine months ended September 30, 2026 were $106.0 million (or 86% of revenues), an increase of $14.9 million compared to $91.1 million (or 86% of revenues) in the same period in 2025. Included in cost of revenues is carrier costs paid on behalf of our federal government customers of approximately $74.2 million and $63.7 million for the nine months ended September 30, 2026 and 2025, respectively.

 

Gross Profit. Gross profit for the nine month period ended September 30, 2026 increased on a dollar basis by $2.4 million to $17.6 million (or 14% of revenues), compared to $15.2 million (or 14% of revenues) in the same period in 2025.

 

Gross profit attributable to carrier services revenue (excluding managed services), for the nine months ended September 30, 2026 was 3% compared to 2% in the same period last year, the gross profit reflected related to carrier services results from fees received from third party payment platforms associated with vendor payments made on behalf of customers. Gross profit as a percentage of managed services revenue (excluding carrier services) for the nine months ended September 30, 2026 was 33% compared to 34% in the same period last year. The decrease was in part due to the increase in reselling revenues, which carry a lower gross margin than our other managed services revenues, in the nine-months ended September 30 2026 compared to 2025.

 

 
28

Table of Contents

 

 

 

 

NINE MONTHS ENDED

 

 

 

 

 

SEPTEMBER 30,

 

 

Dollar

 

 

 

2026

 

 

2025

 

 

Variance

 

Revenues:

 

 

 

 

 

 

 

 

 

Carrier Services

 

$76,169,860

 

 

$65,031,039

 

 

$11,138,821

 

Managed Services

 

 

47,472,660

 

 

 

41,289,758

 

 

 

6,182,902

 

Total revenue

 

 

123,642,520

 

 

 

106,320,797

 

 

 

17,321,723

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

 

Carrier Services

 

 

1,909,440

 

 

 

1,320,076

 

 

 

589,364

 

Managed Services

 

 

15,720,625

 

 

 

13,850,999

 

 

 

1,869,626

 

Total gross profit

 

 

17,630,065

 

 

 

15,171,075

 

 

 

2,458,990

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Margin:

 

 

 

 

 

 

 

 

 

 

 

 

Carrier Services

 

 

3%

 

 

2%

 

 

 

 

Managed Services

 

 

33%

 

 

34%

 

 

 

 

Total gross margin

 

 

14%

 

 

14%

 

 

 

 

 

Sales and Marketing. Sales and marketing expenses include employee labor, excluding fringe benefit costs, and sales commissions associated with our sales force, commission fees paid to non-employee sales agents and partners, and costs associated with travel and trade shows. Sales and marketing expense for the nine months ended September 30, 2026 was $1.9 million (or 2% of revenues) and remained relatively consistent compared to $2.0 million (or 2% of revenues) in 2025.

 

General and Administrative. General and administrative expenses include employees in finance, human resources, information technology, and other administrative support functions; employee labor not associated with any single revenue producing activity, all company fringe benefits, including paid time off, employee health and medical insurance, 401k matching contributions, and payroll taxes. General and administrative expenses also include professional services to include audit, consulting, outside legal, and outsourcing services. Certain of these expenses, including those associated with the operation of our technical infrastructure as well as components of our operating expenses, are generally less variable in nature and may not correlate to the changes in revenue. General and administrative expenses for the nine months ended September 30, 2026 were $15.4 million (or 12% of revenues), and remained relatively consistent compared to $14.5 million (or 14% of revenues) in 2025. The increase was partially offset by approximately $1.7 million of internal IT labor costs that are typically reflected within general and administrative expenses but were reassigned during the current period to implementation activities associated with a long-term customer contract. These costs were deferred during the period in connection with implementation activities under the long-term customer contract. Because the implementation services do not represent a distinct performance obligation, the related revenue and costs are deferred and will be recognized over the contract term.

 

Excluding the impact of these deferred implementation costs, operating expenses would have increased more significantly period over period. Upon go-live, the deferred costs will be amortized to cost of sales over the contract term. To the extent internal IT personnel continue to perform billable customer work after go-live, related labor costs are expected to be classified as direct costs rather than general and administrative expenses.

 

Depreciation and Amortization. Depreciation and amortization expense for the nine months ended September 30, 2026 was $580,770 as compared to $682,700 in 2025.

 

Other Income (Expense), Net. Other income, net for the nine months ended September 30, 2026 was $175,400 compared to other income, net of $71,670 in 2025 as a result of higher earnings on cash deposits and a gain on sale of property and equipment.

 

Income Taxes. Income tax benefit for the nine months ended September 30, 2026 was $28,550 as compared to income tax benefit of $12,000 in 2025.

 

 
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Net Loss. As a result of the cumulative factors described above, net loss for the nine months ended September 30, 2026 decreased by $1.9 million to approximately $50,000 compared to net loss of $1.9 million for the nine months ended September 30, 2025.

 

Liquidity and Capital Resources

 

Our immediate sources of liquidity include cash, accounts receivable, unbilled receivables and access to our credit agreement with Old Dominion National Bank.

 

At September 30, 2026, our net working capital was approximately $2.7 million compared to $2.3 million at December 31, 2025. We believe that our existing unrestricted cash balance of $10.1 million and our anticipated cash flows from operations and access to our credit facility, will be sufficient to meet our working capital, expenditure, and contractual obligation requirements for the next 12 months.

 

On April 10, 2026, we entered into an At The Market Offering Agreement with H.C. Wainwright & Co., LLC (the “Sales Agent”) under which we may issue and sell in a registered offering shares of our common stock having an aggregate offering price of up to $15.5 million from time to time through or to the Sales Agent (the “ATM Offering”). We expect to use net proceeds, if any, from the ATM Offering over time as a source for general corporate purposes, including potentially expanding existing businesses, acquiring businesses and investing in other business opportunities. No sales of shares were made under the ATM Offering during the nine months ended September 30, 2026

 

Cash Flows from Operating Activities

 

For the nine months ended September 30, 2026, net cash used in operations was approximately $0.4 million compared to net cash provided by operations of $5.9 million in the same period in 2025. Cash used in operations was driven by increases in accounts receivables and is partially offset by increases in deferred revenue and temporary payable timing differences.

 

Our single largest cash operating expense is the cost of labor and Company-sponsored healthcare benefit programs. Our second largest category of cash operating expenses includes facilities and information technology costs, including infrastructure, software, cybersecurity, communications and other technical capabilities necessary to support our operations and deliver services to our customers.

 

We lease most of our facilities under non-cancellable long term contracts that may limit our ability to reduce fixed infrastructure expenditures in the short term. Any changes to our fixed labor and/or infrastructure costs may require a significant amount of time to take effect depending on the nature of the change made.

 

We may experience delays in billing and collecting amounts due from customers as a result of administrative processes, invoice processing requirements, changes in customer personnel, and the implementation or modification of customer contracts and services. These delays, which are often beyond our control, may be more pronounced during significant new customer implementations or changes in existing customer deployments and can result in increased balances of unbilled receivables. Although we have historically been able to resolve these matters, prolonged delays may increase collection risks, including those associated with funding availability and the ability to resolve outstanding billing matters, while also requiring us to fund related operating costs and vendor obligations before receiving payment from customers. Failure to resolve these matters and collect outstanding balances on a timely basis could materially adversely affect our operating cash flows and liquidity.

 

Cash Flows from Investing Activities

 

Cash used in investing activities primarily reflects our investments in technology infrastructure and other long-term assets. We maintain our own technology infrastructure and periodically invest in hardware, software, cybersecurity and related technologies to support our operations, enhance our solutions and meet customer requirements. We anticipate increased technology investments beginning in the fourth quarter of 2026 and continuing into 2027, primarily to enhance the security and capabilities of our identity management solutions, including upgrades to support post-quantum cryptography, as well as broader cybersecurity and infrastructure improvements. We expect to fund these investments primarily through available cash and, where appropriate, equipment financing arrangements.

 

 
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For the nine months ended September 30, 2026, cash used in investing activities was approximately $36,500 and consisted of purchases of property and equipment offset by proceeds received from disposal of property and equipment.

 

For the nine months ended September 30, 2025, cash used in investing activities was approximately $0.1 million and consisted of purchases of property and equipment.

 

Cash Flows from Financing Activities

 

Cash used in financing activities provides an indication of our debt financing and stock option exercises.

 

For the nine months ended September 30, 2026, cash used in financing activities was approximately $0.9 million and reflects finance lease principal repayments of approximately $353,520, withholding taxes paid on behalf of employees on net settled restricted stock awards of approximately $134,870 and withholding taxes paid on behalf of employees on net settled stock option exercises of approximately $416,890.

 

For the nine months ended September 30, 2025, cash used in financing activities was approximately $0.5 million and reflects line of credit advances and payments of $2.8 million, finance lease principal repayments of approximately $412,300, and withholding taxes paid on behalf of employees on net settled restricted stock awards of approximately $130,700.

 

Expected Future Cash Requirements

 

The Company's capital expenditures have historically consisted primarily of investments in information technology infrastructure, software, equipment and other assets supporting customer programs and internal operations. Capital expenditures during the nine months ended September 30, 2026 were less than $0.1 million.

 

Based on currently available information and anticipated business requirements, the Company presently expects capital expenditures during the remainder of 2026 to approximate $0.4 million. In addition, the Company currently anticipates capital expenditures during 2027 could approximate $2.0 million, primarily to support anticipated customer programs, technology infrastructure and other strategic initiatives.

 

These anticipated expenditures remain subject to the timing of customer requirements, contract awards, business conditions, procurement schedules and other factors and, accordingly, actual capital expenditures may differ materially from current expectations.

 

Management believes that existing cash balances, cash generated from operations and available sources of liquidity will be sufficient to fund these anticipated capital expenditures.

 

Expected Sarbanes-Oxley Compliance Costs. As a result of the Company's transition to accelerated filer status, the Company expects increased operating cash expenditures associated with compliance with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act during the remainder of 2026 and into 2027. These expenditures are expected to include higher external audit fees, consulting services, additional personnel and other compliance-related costs. Management believes these expenditures can be funded through existing cash balances and cash generated from operations.

 

Contingent Cash Requirement. As previously disclosed, the Company has been selected for award of the successor DHS Cellular Wireless Managed Services ("CWMS 3.0") contract. The award remains subject to a bid protest, and the timing and ultimate outcome of the protest process are uncertain. Upon final resolution of the protest process, if in the Company's favor and satisfaction of the applicable conditions, the Company would become obligated to pay up to approximately $0.6 million of cash incentive compensation under previously approved employee incentive arrangements. Management believes the Company has sufficient liquidity to satisfy this contingent obligation from existing cash balances and operating cash flows. Until the protest process is resolved, no liability has been recognized for these contingent payments.

 

 
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As previously disclosed, on June 24, 2026, the Company was awarded the successor Department of Homeland Security ("DHS") Cellular Wireless Managed Services ("CWMS 3.0") contract. On September 24, 2026, the Government Accountability Office ("GAO") sustained a post-award protest challenging the award and recommended that DHS reevaluate the proposals and make a new contract award determination. DHS has initiated discussions with the parties and requested additional information as part of its reevaluation process. The timing and ultimate outcome of this process remain uncertain, and there can be no assurance that the Company will retain the CWMS 3.0 award.

 

On September 24, 2026, the GAO sustained the protest, recommending that DHS reevaluate the proposals, reopen discussions if appropriate, and make a new contract award determination. Subsequent to September 30, 2026, DHS has requested revised proposals, and WidePoint has submitted a revised proposal for evaluation by DHS. The Company awaits DHS’s announcement of the results of its evaluation and the resulting award decision.

 

The timing and ultimate outcome of this process remain uncertain, and there can be no assurance that the Company will retain the CWMS 3.0 award.

 

Net Effect of Exchange Rate on Cash and Equivalents

 

For the nine months ended September 30, 2026 fluctuations in the Euro and U.S. dollar exchange rate increased the translated value of our foreign cash balances by $12,100. For the nine months ended September 30, 2025, fluctuations in the Euro and U.S. dollar exchange rate decreased the translated value of our foreign cash balances by approximately $52,300.

 

Off-Balance Sheet Arrangements

 

The Company has no existing off-balance sheet arrangements as defined under SEC regulations.

 

 
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not required for smaller reporting companies.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures. Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report on Form 10-Q to ensure information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit is accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in the Company’s internal control over financial reporting during the three month period ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

 
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PART II – OTHER INFORMATION

 

ITEM 1 LEGAL PROCEEDINGS

 

The Company is not currently involved in any material legal proceeding.

 

ITEM 1A RISK FACTORS

 

In addition to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, investors should carefully consider the following additional or heightened risks and uncertainties, which could materially adversely affect our business, financial condition, results of operations and cash flows. Except as described below, there have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K.

 

Our failure to retain the DHS CWMS 3.0 contract award could materially adversely affect our business, financial condition and results of operations.

 

On June 24, 2026, the Department of Homeland Security ("DHS") awarded the successor Cellular Wireless Managed Services ("CWMS 3.0") contract to the Company. On September 24, 2026, the Government Accountability Office ("GAO") sustained in part a post-award protest and recommended that DHS reevaluate the proposals and make a new contract award determination. DHS has subsequently initiated discussions with the parties as part of its reevaluation process. There can be no assurance that the Company will ultimately retain the award, and any subsequent award decision may be subject to further protest. The existing CWMS contract accounted for approximately 80% of our consolidated revenues and 39% of consolidated gross profit for the nine months ended September 30, 2026. Failure to secure the successor contract could result in a substantial reduction in revenues and gross profit, significant operating disruptions, and an inability to reduce operating costs sufficiently or promptly to offset the loss of business, which could materially adversely affect our liquidity, financial condition and results of operations.

 

Unfavorable customer and vendor contract terms or inadequate contract pricing and management could adversely affect our profitability and financial condition.

 

Our business depends on our ability to negotiate, price and manage complex customer and vendor contracts, including agreements with large government customers and commercial suppliers that may possess greater negotiating leverage. Inadequately defined scopes of work, unfavorable payment terms, insufficient pricing or cost estimates, and contractual provisions that expose us to significant liabilities could result in unexpected costs, reduced margins, disputes or financial losses. Additionally, changes in customer requirements, vendor pricing or performance obligations may increase costs without corresponding increases in revenues. Our failure to adequately evaluate, negotiate or manage these arrangements could materially adversely affect our profitability, cash flows and financial condition.

 

Failure to adequately manage vendors, subcontractors and government contracting compliance requirements could result in financial losses, penalties or contract termination.

 

Our business relies on third-party vendors and subcontractors to deliver products and services to our customers, including federal government agencies. We are subject to extensive government contracting requirements, including supply chain security, subcontracting plans, vendor eligibility, and mandatory contractual flow-down provisions. Failure to adequately evaluate and monitor vendors and subcontractors, ensure compliance with applicable contractual and regulatory requirements, or identify and address supply chain risks could result in performance disruptions, delivery delays, increased costs, contractual disputes, penalties, or termination of government contracts. In addition, we may be held responsible for certain acts or omissions of our vendors and subcontractors, even when the underlying activities are outside our direct control. Any such failures could materially adversely affect our business, reputation, financial condition and results of operations.

 

Delays or termination of significant customer implementations could adversely affect anticipated revenues and result in write-offs of deferred implementation costs.

 

Our business includes significant customer contracts that require substantial investments in technology development, systems integration and implementation activities before recurring services and associated revenues commence. These implementations may involve complex technical requirements, evolving customer specifications, dependencies on third parties and delays in obtaining customer approvals or achieving operational readiness. Delays, changes in scope, performance difficulties or termination of these arrangements, including termination for convenience by customers, could defer or reduce anticipated revenues, increase costs and adversely affect expected profitability. In addition, we may be required to recognize impairment charges or write off capitalized implementation costs if the associated contracts are terminated or the costs are no longer expected to be recoverable. Any such developments could materially adversely affect our financial condition, results of operations and cash flows.

 

Significant unbilled receivables and delays in customer billing and collections could adversely affect our liquidity and cash flows.

 

Our business generates significant unbilled receivables and contract assets, particularly under government contracts. Billing and collection of these amounts may depend on customer approvals, administrative processes, contract modifications, funding availability and the resolution of billing or contractual issues. Prolonged delays may increase collection risks, particularly where changes in customer personnel, loss of institutional knowledge or funding constraints complicate the resolution of outstanding balances. In addition, we may be required to satisfy vendor obligations, including potential financing charges, and fund ongoing operations before receiving payment from customers. Although we generally expect these amounts to be collectible, extended billing and collection delays could increase working capital requirements, result in credit losses and materially adversely affect our liquidity, cash flows and financial condition.

 

Increased competition from government-operated services and internal agency capabilities could adversely affect demand for our solutions.

 

Certain federal agency customers have transitioned from our identity management solutions to government-wide shared services, including the General Services Administration's USAccess program, and additional customers may elect to do so in the future. We also face competition from federal agencies that perform telecommunications management services internally rather than obtaining those services from outside contractors. Although individual customer losses resulting from these developments have not been material, continued migration to government-operated services and the expansion of internal agency capabilities could result in the cumulative loss of customers and recurring revenues, reduce opportunities for new business, and adversely affect our profitability and long-term growth.

  

 
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ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

Repurchase of Securities

 

The following table represents information with respect to shares of common stock withheld from vesting’s of stock-based compensation awards for employee income tax withholding for the periods indicated:

 

 

 

Total Number of

Shares

Withheld

 

 

Average Price

Per Share

 

 

Dollar Value of Shares Purchased as

as Part of Publicly

Announced Plans

or Programs

 

 

Maximum Dollar Value

of Shares that may be Purchased

Under Approved Plans or Programs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

January 2026

 

 

19,903

 

 

$5.37

 

 

 

-

 

 

$-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

May 2026

 

 

2,718

 

 

$10.30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

22,621

 

 

$5.96

 

 

 

-

 

 

$-

 

 

ITEM 3 DEFAULT UPON SENIOR SECURITIES

 

None

 

ITEM 4 MINE SAFETY DISCLOSURES

 

None

 

ITEM 5 OTHER INFORMATION

 

Directors and Executive Officers. Our directors and executive officers may purchase or sell shares of our common stock in the market from time to time, including pursuant to equity trading plans adopted in accordance with Rule 10b5-1 under the Exchange Act (“Rule 10b5-1”) and in compliance with guidelines specified by the Company. In accordance with Rule 10b5-1 and the Company’s insider trading policy, directors, officers and certain employees who, at such time, are not in possession of material non-public information about the Company are permitted to enter into written plans that pre-establish amounts, prices and dates (or formula for determining the amounts, prices and dates) of future purchases or sales of the Company’s stock, including shares acquired pursuant to the Company’s equity plans (“Rule 10b5-1 Trading Plans”). Under a Rule 10b5-1 Trading Plan, a broker executes trades pursuant to parameters established by the director or executive officer when entering into the plan, without further direction from them.

 

During the three months ended September 30, 2026, none of our directors or executive officers adopted, terminated or modified any contract, instruction or written plan for the purchase or sale of our securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement.

 

 
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ITEM 6. EXHIBITS

 

EXHIBIT NO.

 

DESCRIPTION

 

 

 

10.1

 

Amendment to Note to Loan Agreement Old Dominion National Bank (Filed herewith)

 

 

 

31.1

 

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith).

 

 

 

31.2

 

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith).

 

 

 

32

 

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Furnished herewith).

 

 

 

101.

 

Interactive Data Files

 

 

 

101.INS+

 

XBRL Instance Document

 

 

 

101.SCH+

 

XBRL Taxonomy Extension Schema Document

 

 

 

101.CAL+

 

XBRL Taxonomy Extension Calculation Linkbase Document

 

 

 

101.DEF+

 

 XBRL Taxonomy Definition Linkbase Document

 

 

 

101.LAB+

 

XBRL Taxonomy Extension Label Linkbase Document

 

 

 

101.PRE+

 

XBRL Taxonomy Extension Presentation Linkbase Document

 

 

 

104.

 

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

 

 
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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

  

 

WIDEPOINT CORPORATION

    

Date: November 12, 2026

/s/ JIN H. KANG

 

 

Jin H. Kang

 
  

President and Chief Executive Officer

 
    

Date: November 12, 2026

 

/s/ ROBERT J. GEORGE

 

 

 

Robert J. George

 

 

 

Chief Financial Officer

 

 

 
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